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08-16-2005 ERMU MIN ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION August 16,2005 Members Present: Jerry Takle,President;John Dietz,Vice Chair;James Tralle,Trustee Staff Present: Bryan Adams,General Manager; Glenn Sundeen,Line Superintendent; Theresa Slominski,Office Manager Others Present: Pat Klaers,City Administrator 1. Call meeting to order August 16,2005 President Jerry Takle called the August 16,2005,meeting to order at 4:00 p.m. 2. Consider Utilities Agenda James Tralle moved to approve the August 16,2005,Utilities Agenda with three additional items for discussion under Other Business. John Dietz seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda John Dietz had questions regarding the financials,staff responded. James Tralle moved to approve the Consent Agenda as follows: July Check Register July 12,2005,Minutes Financials John Dietz seconded the motion. Motion carried 3-0. 5.1 Staff Up-dates Bryan Adams reported on the recent law changes that affect Elk River Municipal Utilities. Minnesota law change reflects that addresses of board members are now considered private information. The Federal Energy Bill repealed PUHCA which will allow more mergers of electric utility companies. This could cause higher rates in the future. The Minnesota Energy Bill has a provision allowing municipal utilities to invest in Transmission Companies or Transco. Further study is needed to determine the direct impact on Elk River Municipal Utilities. Discussion followed regarding energy,ethanol,and bio-diesel as alternate fuel sources. Staff is looking into the financial implications of such projects and will be addressing that in the future. 5th Street project is near completion other than a few inspections. A few of the water lines had to be cleaned out and there were more non-copper service lines replaced than anticipated. Glenn Sundeen informed the Commission of the 30 new services in the past month. Staff is currently rebuilding the line at the plant to support the new feeder,and also getting prepared for the Otsego project. There were a few outages which consisted of animals and lightning. Page 2 Regular meeting of the Elk River Municipal Utilities Commission August 16,2005 Theresa Slominski notified the Commission we are currently interviewing for clerk/receptionist position. The IRS tax issue is being dealt with. An electronic payment system is being looked into as an optional source for customers to pay their bill. It would cost the utilities$25.00 per month but would save time in the posting process. 5.2 Review Target Data Center Proposal Staff continues to work on the proposed Target Data Center facility. Bryan Adams and Jerry Talde recently toured Target Data Center facility in Brooklyn Park. Ryan Companies, working on behalf of the Target Data Center,is asking for a will-serve letter as part of their operational analysis. Elk River Municipal Utilities responded to this will-serve letter with schedule,terms,and conditions thus committing our resources to this project. The question still remains as to the form of assurance that adequate electric revenues will be derived from this facility. Pat Klaers asked if Target has made a commitment as to how many years they would be here. John Dietz asked if we would require a commitment letter. Bryan Adams replied we cannot require one as it would jeopardize our tax exempt bond status. Staff has confirmed the expansion of Substation 14 with GRE using USG as engineers,along with meeting Terry Maurer,City Engineer and MNDOT to find the best electric feeder route and avoid future problems. A new rate structure for the high capacity availability is being looked into for the Target facility. 5.3 Update Otsego Growth On August 8,2005, Otsego City Council with Planning Commission recommendation, approved the expansion of the Otsego substation located east of Packard Avenue off County Road 39. The conditions of this expansion were to meet all set backs,bury the distribution power lines running east,provide a 42"wide easement on north side of property for future road expansion,paint or replace existing metal meter building(owned by Wright-Hennepin Cooperative),provide a landscaping plan,and comply with no overnight storage of vehicles. 5.4 Review Antennas on Water Towers Previous requests for installing communication antennas on utility water towers have been denied due to safety, space,and maintenance issues. Elk River City council has requested the utilities to reconsider due to zoning issues. At the July 25,2005, City Council meeting,it was the concensus of the council that we enter into negotiations with the telecommunications companies to allow antennas on our water towers instead of building telecommunication towers. Bryan Adams recently met with Nextel and discussed the options available. Nextel was going to look into the height and location requirements and get back to us. Staff is still waiting for a response. The concern Elk River Municipal Utilities has is the security issues,the manpower stress it would put on the water department,and what would Nextel be willing to pay for rental. This will be readdressed at a later date. No action taken. Page 3 Regular meeting of the Elk River Municipal Utilities Commission August 16,2005 6.1 Review 2006 Budget Schedule Staff has started the process of assembling the year 2006 budget. Commission reviewed proposed schedule of Travel&Training along with personnel projections. The Travel& Training budget is similar to 2005 with some minor changes. The personnel projections reflect the addition of two people. The first person is a supervisor for metering, generation, locating,and CAD operator. The second would be locator/CAD operator which is necessitated due to the new rule making,requiring water and waste water utilities to locate their facilities in the public right of way. John Dietz recommends checking with the City to see if we could share an employee. 6.2 Review Large Electric Capital Projects Otsego's growth,potential Target Data Center facility,and normal growth have initiated a number of possible projects for the electric department. A list of projects and costs were discussed along with the reasoning of why we should proceed now instead of wait. Staff is checking into bond rates with MMUA and conventional rates through the City. This will be revisited at the next Commission meeting. 6.3 Review Substation Transformer Purchases Due to the continued growth in Elk River,a$600,000 project was scheduled to upgrade two substations in 2006. The original plan was to purchase a new 15 MVA 69KV transformer for West Substation and the existing 12 MVA 69KV substation transformer would go to the North Substation. Staff is recommending holding off upgrading the North Substation at this time and instead upgrade the Otsego Substation. Bids for this transformer will be received on August 30,2005. This bid also contains an option for an additional 69KV transformer for Station 14 to accommodate the Target project. We will know more after the Target board meeting on September 14,2005. Other Business Bryan Adams reviewed the 2005 Electric Distribution Capital Projects. Staff recommends delaying two rebuild projects worth$245,000 and accelerating the Feeder 97 construction from Station 14 to West Business Park increasing the scope of project from$50,000 to $250,000. James Tralle moved to approve the change of the 2005 Electric Distribution Capital Projects. John Dietz seconded the motion. Motion carried 3-0. John Dietz inquired as to why the lawn at the power plant looks so bad. Glenn Sundeen informed him that the sprinkling system was recently fixed however,he will have it checked again as it still is not working properly. Page 4 Regular meeting of the Elk River Municipal Utilities Commission August 16,2005 John also was concerned about the proper identification of Elk River Municipal Utilities employees. All employees should have an identification badge for customers if they are to do work in or near their home. It was suggested to use a bill stuffer or put an article in the next Connector that is in the Elk River Star News regarding what to do if a customer is suspicious of someone saying they are a City or Utility employee needing to get into their home. There was no other business. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, September 13,2005. President Jerry Talde adjourned the regular meeting of the Elk River Municipal Utilities Commission at 5:30 p.m. Respectfully ubmitted, Judy Mc padd%ii, Recording Clerk